We implemented a randomized field experiment that tested ways to stimulate savings by international migrants in their origin country. We find that migrants value opportunities to exert greater control over financial activities in their home countries. We offered U.S.-based migrants bank accounts in El Salvador, randomly varying migrant control over El Salvador–based savings by offering different accounts across treatments. Migrants offered the greatest degree of control accumulated the most savings. Impacts likely represent increases in total savings; there is no evidence that savings increases were simply reallocated from other savings mechanisms. Enhanced control over home country savings does not affect remittances sent home.

Migrants were randomly assigned to one of three treatment groups or a comparison group, each with equal (25%) probability.

All project participants were visited by marketers who emphasized the benefits of remitting funds directly into accounts and of remittance-recipient access to funds via ATM/debit cards (rather than having to wait in a teller line to receive a remittance).

The treatment groups are:
Treatment 1: Offer of assistance in setting up an account in the name of someone in El Salvador, into which the migrant could remit, granting the recipient full control of the deposits
Treatment 2: Offer a joint account where the recipient and the remitter would have access through ATM cards, allowing monitoring, but no enforcement on the part of the migrant
Treatment 3: Treatment 2 plus an account only in the name of the migrant, providing full ability to control funds in the account.

The control group only received the talk but no offer to open an account.

Intervention Start Date

2007-12-01

Intervention End Date

2008-07-31

Primary Outcomes

Primary Outcomes (end points)

1) Account opening at Banco Agricola
2) Savings balances in the bank accounts opened for the study
3) Savings in other instruments.
4) Remittances

Primary Outcomes (explanation)

1) Account opening at Banco Agricola: How many and what kind of accounts were opened by the three treatment groups twelve months after intervention
2) Savings balances in the bank accounts opened for the study: Obtained from bank administrative database 12 and 48 months after intervention.
3) Savings in other instruments: Total savings in El Salvador, in the U.S. and in cash, obtained from the follow-up survey
4) Remittances: Sent through the partner bank (administrative data) or through all channels (follow-up survey).

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

Experimental Design

Study participants were recruited from those waiting outside the El Salvadorian embassy in Washington DC. Migrants of Salvadorian origin, who entered the US for the first time at least 15 years ago and had sent money home in the past year, were eligible for the study. Those who met the conditions and signed the consent forms were administered the baseline survey and visited by marketers who made the account offers according to assigned treatment status. In treatments that required coordination with the remittance recipient back in El Salvador, marketers facilitated account opening by allowing the migrant a free phone call to El Salvador and setting up the account opening meeting in El Salvador. The follow-up survey was conducted approximately 12 months after the initial offer of account opening.

SAVINGS IN TRANSNATIONAL HOUSEHOLDS: A FIELD EXPERIMENT AMONG MIGRANTS FROM EL SALVADOR

We implemented a randomized field experiment that tested ways to stimulate migrants’ savings in their origin country. We find that migrants value opportunities to exert greater control over financial activities in their home countries. We offered U.S.-based migrants bank accounts in El Salvador, randomly varying migrant control over El Salvador–based savings by offering different accounts across treatments. Migrants offered the greatest degree of control accumulated the most savings. Impacts likely represent increases in total savings; there is no evidence that savings increases were simply reallocated from other savings mechanisms. Enhanced control over home country savings does not affect remittances sent home.